Obama plans tax increases on employers to aid states with jobless benefits, EmploymentCrossing finds 534,000 jobs.

February 10, 2011   |    PDF version

Pasadena, CA — The Obama administration is recommending a proposal for the FY2012 budget that would shift the burden of providing unemployment insurance from states to employers.

The proposal says that states will be allowed to raise taxes on employers beginning in 2014. The main reason for the proposal is that states are running out of funds to pay jobless benefits to their unemployed residents. Already 30 states have emptied their unemployment trust funds. They are borrowing $42 billion from the federal government. California is the biggest recipient of this federal aid at $9.9 billion, followed by Michigan at $3.7 billion and Pennsylvania at number three with $3.3 billion.

South Carolina, Michigan and Indiana, three of the hardest hit states, are even over the limit in their borrowing from the federal government. This has resulted in an automatic activation of a tax increase on businesses to cover the states' unemployment fund. 20 other states could be facing this situation by year end.

In the current setup, employers pay state taxes on the first $7,000 in wages. But the Obama administration's plan will increase the payout from employers to the first $15,000 in wages in 2014. Under the proposed budget, the states would not be able to raise taxes to pay for their unemployment insurance fund. The states would also not have to pay interest on their unemployment insurance debt that they have taken from the federal government.

EmploymentCrossing, a job aggregator website, has been able to find over 534,000 jobs in the last seven days. Most of the jobs are in the healthcare and information technology sectors, followed by retail and the hospitality industry.

Contact:
Roger Croft
Editorial Coordinator
Employment Research Institute
626-243-1814
rogerc@employmentresearchinstitute.com

About EmploymentCrossing:
EmploymentCrossing is part of the Employment Research Institute, which is one of the most powerful and comprehensive organizations dedicated to helping professionals find jobs that will enhance their careers. Employment Research Institute consists of hundreds of industry-specific and location-specific job boards which consolidates every job opening it can find in one convenient location. The website also offers a seventy two-hour free trial to new members.